Yellow Files For Bankruptcy After Shutting Down
Yellow Corp., a once-dominant US trucking company with a 99-year history, has filed for bankruptcy as it ceases operations, leaving many employees devastated and facing uncertainty about their future.
The Nashville-based logistics provider announced the Chapter 11 filing on Sunday, seeking relief in the US Bankruptcy Court for the District of Delaware. CEO Darren Hawkins expressed deep disappointment over the company’s closure, highlighting the decades of service Yellow provided to its employees, offering solid, well-paying jobs and fulfilling careers.
The company aims to reach an agreement with creditors, pending court approval, to pay certain wages, benefits, and obligations to vendors and suppliers. In its court filing, Yellow disclosed a list of creditors, including prominent names like Amazon, Home Depot, and Goodyear Tire & Rubber Company.
The decision to file for bankruptcy comes after the trucking company suspended operations over a week ago, leaving 30,000 employees out of work. The company had previously warned of financial struggles, risking the possibility of running out of the funds needed to continue its operations.
Yellow Corp., once a stalwart in the trucking industry, primarily operated under the name Yellow Freight since its inception in 1924. It was a dominant carrier in the “less-than-truckload” (LTL) segment, focusing on moving pallet-sized shipments of freight. Alongside two other unionized LTL rivals, Roadway and Consolidated Freight, Yellow formed “the Big Three” in the industry.
Deregulation in 1984 brought increased competition to unionized LTL carriers like Yellow. The company faced challenges from nonunion carriers with cost advantages and began accumulating debt to acquire many of its unionized rivals, including Roadway in 2004.
Yellow Corp.’s long-term debt stood at around $1.5 billion, with a significant portion coming from a pandemic relief loan received in 2020. The company’s dominance in the trucking industry had waned, and mounting troubles further eroded its position in the market. Changes in consumer spending patterns, a slowdown in freight demand, and competitive pressure from other carriers contributed to its downfall.
As Yellow’s shipments declined and customers shifted to alternative carriers, the company faced increasing financial strain. The missed payments to union pension and health insurance funds exacerbated the situation, and customers began diverting business to competitors. In the end, Yellow had no choice but to halt its operations, leaving employees and the industry grappling with the loss of a once-prominent player in the trucking landscape.
